[ARK Funds Logo Omitted]
--------------------------------------------------------------------------------
CORPORATE CLASSES
SEMI ANNUAL REPORT
OCTOBER 31, 2000
U.S. TREASURY CASH MANAGEMENT PORTFOLIO
U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO
PRIME CASH MANAGEMENT PORTFOLIO
TAX-FREE CASH MANAGEMENT PORTFOLIO
[Ark Graphic Omitted]
<PAGE>
TABLE OF CONTENTS
--------------------------------------------------
LETTER TO SHAREHOLDERS 1
MANAGEMENT DISCUSSION AND ANAYLSIS 2
STATEMENTS OF NET ASSETS 4
STATEMENTS OF OPERATIONS 11
STATEMENTS OF CHANGES IN NET ASSETS 12
FINANCIAL HIGHLIGHTS 13
NOTES TO FINANCIAL STATEMENTS 14
NOTICE TO SHAREHOLDERS 16
<PAGE>
October 31, 2000
DEAR ARK FUNDS SHAREHOLDERS:
We are now mid-way through our fiscal year, and we are pleased to update you on
the progress of the ARK Cash Management Portfolios. The Cash Management
Portfolios were created earlier this year to better meet our corporate and
municipal shareholders' short-term investment needs by offering more investment
choices.
Our Annual and Semi Annual Reports are always a great way for us to touch base
with you, and provide you with the information you need to keep abreast of your
investments. This Semi Annual Report includes the portfolio manager's economic
review and outlook for the ARK Cash Management Portfolios for the year 2001, as
well as information on portfolio performance, holdings, and diversification as
of October 31, 2000.
We thank you for investing in the ARK Funds, and we look forward to continuing
to help you meet your short-term financial goals.
/s/ signature omitted
William H. Cowie, Jr.
Chairman
1
<PAGE>
CASH MANAGEMENT PORTFOLIOS
MANAGEMENT DISCUSSION AND ANALYSIS
[James M. Hannan Photo Omitted]
JAMES M. HANNAN
---------------------------------------------------
PORTFOLIO MANAGER
JAMES M. HANNAN IS A PRINCIPAL OF ALLIED INVESTMENT
ADVISORS, INC. HE IS PORTFOLIO MANAGER OF THE CASH
MANAGEMENT PORTFOLIOS. HE HAS MORE THAN 13 YEARS OF
INVESTMENT MANAGEMENT EXPERIENCE.
REVIEW AND OUTLOOK
The Federal Reserve (the "Fed") has not changed monetary policy since May
16th of this year, when it raised short-term interest rates by 1/2% to 6.5%.
However, the Fed continues to be more concerned with the risks of inflation than
with the risk of an economic slowdown. The Federal Open Market Committee (FOMC)
released the following statement at the conclusion of their meeting on October
3, 2000: "Against the background of its long-term goals of price stability and
sustainable economic growth ... the Committee believes the risks continue to be
weighted mainly toward conditions that may generate heightened inflation
pressures in the future."
Clearly, the economy is slowing as the one-two punch of higher oil prices
and higher short-term interest rates around the world are taking effect. For the
quarter ended September 30, 2000, the Gross Domestic Product (GDP) increased at
only a 2.7% rate versus a 5.6% pace for the second quarter of the year. The
labor market is no longer tightening as the unemployment rate has remained
between 3.9% and 4.1% for the last year. Another sign of the slowdown is the
decline in the Purchasing Managers Survey, which registered its lowest reading
since December 1998. Inflation, as measured by the Consumer Price Index (CPI),
is up 3.5% for the past year while the core rate of inflation is up only 2.6%.
The core CPI is up only 0.2% above its five-year average of 2.4%. The economic
slowdown and stable inflation is good news to the Fed and may signal the end of
their tightening cycle, which started in June 1999. As economic statistics have
revealed a slowdown, investors have changed their expectations for future
monetary policy. Currently, we share the market's expectations that the Fed will
leave interest rates unchanged for the remainder of the year. This change in
perception resulted in the one-year LIBOR declining from 7.2% to 6.7% on October
31st.
Our strategy changed as we became more confident in the economic slowdown,
and our opinion for future Fed policy changed from expecting further rate
increases, to a Fed on hold, to potentially lowering short term interest rates
during the first half of 2001. We extended the average maturity of the
Portfolios by purchasing higher-yielding securities that mature in the fall of
2001. Looking forward, we will focus on purchasing securities maturing during
the first quarter of 2001 to take advantage of any potential spike in year-end
interest rates. As always, we will continue to utilize our relative value
investment process and actively manage the ARK Cash Management Portfolios.
2
<PAGE>
ARK FUNDS SEMI ANNUAL REPORT OCTOBER 31, 2000
U.S. TREASURY CASH MANAGEMENT
PORTFOLIO PERFORMANCE AS OF
OCTOBER 31, 2000*
--------------------------------------------------------------
Corp. II iMoneyNet Inc.
Class 100% U.S. Treasury Average+
--------------------------------------------------------------
Seven Day
Effective Yield 5.86% 5.58%
--------------------------------------------------------------
[Chart Omitted]
Plot points are as follows:
THIRTY-DAY YIELD COMPARISON
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
ARK U.S. Treasury Cash Management Portfolio, iMoneyNet, Inc.
Corporate II Class 100% U.S. Treasury Average+
------------------------------------------------------------------------------------------
<S> <C> <C>
7/31/00 1.99% 4.65%
------------------------------------------------------------------------------------------
8/31/00 5.79 4.79
------------------------------------------------------------------------------------------
9/30/00 5.85 4.97
------------------------------------------------------------------------------------------
10/31/00 5.70 5.12
------------------------------------------------------------------------------------------
</TABLE>
U.S. GOVERNMENT CASH MANAGEMENT
PORTFOLIO PERFORMANCE AS OF
OCTOBER 31, 2000*
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
iMoneyNet Inc. iMoneyNet Inc.
Corp. II Corp. III Gov't Only Institutions U.S. Gov't & Agencies
Class Class Only Average+ Average+
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Seven Day
Effective Yield 6.38% 6.22% 6.08% 5.92%
--------------------------------------------------------------------------------------------
</TABLE>
[Chart Omitted]
Plot points are as follows:
THIRTY-DAY YIELD COMPARISON
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ARK U.S. Government iMoneyNet, Inc. ARK U.S. Government iMoneyNet, Inc.
Cash Management Portfolio Government Only Institutions Cash Management Portfolio U.S. Government &
Corporate II Class Only Average+ Corporate III Class Agencies Average+
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7/31/00 5.98% 6.19% 5.86% 6.04%
------------------------------------------------------------------------------------------------------------------------------
8/31/00 6.03 6.16 5.89 6.01
------------------------------------------------------------------------------------------------------------------------------
9/30/00 6.05 6.16 5.90 6.01
------------------------------------------------------------------------------------------------------------------------------
10/31/00 6.04 6.16 5.90 6.01
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRIME CASH MANAGEMENT PORTFOLIO
PERFORMANCE AS OF
OCTOBER 31, 2000*
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
iMoneyNet, Inc.i MoneyNet, Inc.
Corp. Corp. II Corp. III First Tier Institutions First Tier
Class Class Class Only Average+ Average+
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Seven Day
Effective Yield 6.63% 6.36% 6.21% 6.26% 5.91%
--------------------------------------------------------------------------------------
</TABLE>
[Chart Omitted]
Plot points are as follows:
THIRTY-DAY YIELD COMPARISON
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
ARK Prime Cash iMoneyNet, Inc. ARK Prime Cash iMoneyNet, Inc. ARK Prime Cash
Management Portfolio, First Tier Institutions Management Portfolio, First Tier Management Portfolio,
Corporate Class Only Average+ Corporate II Class Average+ Corporate III Class
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7/31/00 0.82% 6.25% 3.08% 5.90%
-----------------------------------------------------------------------------------------------------------------------------------
8/31/00 6.37 6.26 6.54 5.91 $3.09
-----------------------------------------------------------------------------------------------------------------------------------
9/30/00 6.37 6.25 6.12 5.90 5.97
-----------------------------------------------------------------------------------------------------------------------------------
10/31/00 6.38 6.25 6.13 5.89 5.98
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TAX-FREE CASH MANAGEMENT PORTFOLIO
PERFORMANCE AS OF
OCTOBER 31, 2000*
----------------------------------------------------------------------------
iMoneyNet, Inc. Tax-Free Stockbroker
Corp. III Tax-Free Institutions & General Purpose
Class Only Average+ Average+
----------------------------------------------------------------------------
Seven Day
Effective Yield 3.74% 3.94% 3.69%
----------------------------------------------------------------------------
[Chart Omitted]
Plot points are as follows:
THIRTY-DAY YIELD COMPARISON
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
ARK Tax-Free iMoneyNet, Inc. iMoneyNet, Inc.
Cash Management Portfolio, Tax-Free Institutions Tax-Free Stockbroker
Corporate III Class Only Average+ & General Purpose Average+
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7/31/00 3.38% 3.64% 3.43%
-----------------------------------------------------------------------------------------------------------------------------------
8/31/00 3.47 3.76 3.53
-----------------------------------------------------------------------------------------------------------------------------------
9/30/00 3.66 3.98 3.75
-----------------------------------------------------------------------------------------------------------------------------------
10/31/00 3.68 3.96 3.72
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
* Past performance of the Portfolios is not predictive of future performance.
+ The performance of the iMoneyNet, Inc. indices does not include operating
expenses that are incurred by the Portfolio.
</FN>
</TABLE>
3
<PAGE>
CASH MANAGEMENT PORTFOLIOS
U.S. TREASURY CASH MANAGEMENT PORTFOLIO
STATEMENT OF NET ASSETS
AS OF OCTOBER 31, 2000 (UNAUDITED)
[Pie Graphic Omitted]
% OF TOTAL PORTFOLIO INVESTMENTS
U.S. Treasury Bills -- 100%
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
U.S. TREASURY BILLS (A) -- 100.5%
6.143%, 01/04/01 $5,000 $4,946
6.105%, 01/11/01 5 5
6.063%, 12/07/00 2,149 2,136
6.052%, 12/07/00 923 918
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $8,005) $8,005
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.5%
(Cost $8,005) $8,005
================================================================================
OTHER ASSETS AND LIABILITIES, NET-- (0.5%) $ (36)
================================================================================
NET ASSETS:
Portfolio Shares of Corporate II Class
(unlimited authorization -- no par value)
based on 7,968,803 outstanding shares
of beneficial interest 7,969
Portfolio Shares of Corporate III Class
(unlimited authorization -- no par
value) based on 101 outstanding shares
of beneficial interest --
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $7,969
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE II CLASS $1.00
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE III CLASS $1.00
================================================================================
(A) THE EFFECTIVE YIELD AT TIME OF PURCHASE IS SHOWN AS THE RATE ON THE
STATEMENT OF NET ASSETS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
<PAGE>
ARK FUNDS SEMI ANNUAL REPORT OCTOBER 31, 2000
U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO
STATEMENT OF NET ASSETS
AS OF OCTOBER 31, 2000 (UNAUDITED)
[PIE GRAPHIC OMITTED]
% OF TOTAL PORTFOLIO INVESTMENTS
Repurchase Agreements -- 41%
U.S Government Agency Obligations -- 59%
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 58.9%
FFCB (A)
6.725%, 08/08/01 $10,000 $ 9,509
FHLB (B)
6.480%, 11/01/00 10,000 9,995
FHLB (A)
6.674%, 01/10/01 25,000 24,686
FHLMC (A)
6.539%, 01/11/01 20,000 19,746
6.500%, 04/12/01 10,000 9,717
FHLMC, MTN
6.350%, 01/05/01 50,000 49,958
FNMA
8.250%, 12/18/00 10,000 10,016
FNMA (A)
6.747%, 11/30/00 10,000 9,948
6.609%, 12/14/00 10,000 9,923
FNMA (B)
6.470%, 11/01/00 10,000 9,994
SLMA, MTN (B)
6.752%, 11/07/00 10,000 9,997
6.732%, 11/07/00 10,000 9,996
6.700%, 11/07/00 9,000 8,994
6.695%, 11/07/00 15,000 15,000
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $207,479) $207,479
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 41.2%
DEUTSCHE BANK
6.560%, dated 10/31/00,
matures 11/01/00, repurchase
price $60,010,933 (collateralized
by U.S. Treasury Obligations:
total market value
$61,200,792) 60,000 60,000
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
GOLDMAN SACHS GROUP
6.300-6.550% dated 10/31/00,
matures 11/01/00, repurchase
price $69,997,868 (collateralized
by U.S. Treasury Obligations:
total market value
$71,385,540) $69,985 $ 69,985
SALOMON SMITH BARNEY
6.530% dated 10/31/00,
matures 11/01/00, repurchase
price $15,002,721 (collateralized
by U.S. Treasury Obligations:
total market value
$15,308,577) 15,000 15,000
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $144,985) $144,985
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.1%
(Cost $352,464) $352,464
================================================================================
OTHER ASSETS AND LIABILITIES, NET-- (0.1%) $ (255)
================================================================================
NET ASSETS:
Portfolio Shares of Corporate Class
(unlimited authorization -- no par value)
based on 100 outstanding shares
of beneficial interest --
Portfolio Shares of Corporate II Class
(unlimited authorization -- no par value)
based on 349,664,025 outstanding shares
of beneficial interest 349,664
Portfolio Shares of Corporate III Class
(unlimited authorization -- no par
value) based on 2,541,911 outstanding shares
of beneficial interest 2,542
Accumulated net realized gain on investments 3
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $352,209
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE CLASS $1.00
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE II CLASS $1.00
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- CORPORATE III CLASS $1.00
================================================================================
(A) DISCOUNT NOTES. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE
DISCOUNT YIELD AT THE TIME OF PURCHASE.
(B) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON OCTOBER 31, 2000. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
MTN -- MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
CASH MANAGEMENT PORTFOLIOS
PRIME CASH MANAGEMENT PORTFOLIO
STATEMENT OF NET ASSETS
AS OF OCTOBER 31, 2000 (UNAUDITED)
% OF TOTAL PORTFOLIO INVESTMENTS
U.S. Government Agency Obligations -- 6%
Corporate Obligations -- 8%
Repurchase Agreements -- 47%
Commercial Paper -- 39%
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.9%
FHLMC (A)
6.401%, 11/01/00 $2,100 $ 2,100
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,100) $2,100
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 8.2%
BANKS -- 0.6%
BANK ONE, NA ILLINOIS, MTN
6.840%, 01/12/01 200 200
--------------------------------------------------------------------------------
TOTAL BANKS $ 200
--------------------------------------------------------------------------------
FINANCIAL SERVICES -- 7.6%
GENERAL MOTORS ACCEPTANCE, MTN
6.750%, 06/05/01 1,000 1,000
GOLDMAN SACHS GROUP, MTN
6.200%, 02/15/01 1,000 998
JOHN DEERE CAPITAL, MTN (B)
6.760%, 01/25/00 400 400
MERRILL LYNCH, SER B, MTN (B)
6.760%, 11/10/00 300 300
--------------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES $2,698
--------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(Cost $2,898) $2,898
--------------------------------------------------------------------------------
COMMERCIAL PAPER (A) -- 39.2%
AUTOMOTIVE -- 8.5%
CHEVRON CAPITAL USA
6.501%, 11/01/00 1,500 1,500
DAIMLER CHRYSLER, NA
6.521%, 11/01/00 1,500 1,500
--------------------------------------------------------------------------------
TOTAL AUTOMOTIVE $3,000
--------------------------------------------------------------------------------
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
FINANCIAL SERVICES -- 23.7%
ASSOCIATES, NA
6.601%, 11/01/00 $1,500 $ 1,500
ATLANTIS ONE FUNDING
6.583%, 11/01/00 300 300
BAVARIA
6.668%, 01/22/01 1,000 985
BETA FINANCE
6.532%, 11/20/00 1,000 997
CIESCO (A)
6.470%, 12/05/00 400 397
CORPORATE ASSET FUNDING
6.527%, 11/01/00 400 400
DAKOTA CERTIFICATES
6.563%, 11/14/00 325 324
DELAWARE FUNDING
6.645%, 01/19/01 1,000 986
EDISON ASSET SECURITIES
6.678%, 01/19/01 1,000 986
JP MORGAN
6.631%, 11/01/00 1,500 1,500
--------------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES $ 8,375
--------------------------------------------------------------------------------
LEASING & RENTING -- 7.0%
HOUSEHOLD FINANCE
6.651%, 11/01/00 1,500 1,500
PITNEY BOWES CREDIT
6.520%, 11/16/00 1,000 997
--------------------------------------------------------------------------------
TOTAL LEASING & RENTING $ 2,497
================================================================================
TOTAL COMMERCIAL PAPER
(Cost $13,872) $13,872
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 47.1%
GOLDMAN SACHS GROUP
6.550%, dated 10/31/00,
matures 11/01/00, repurchase
price $7,818,422 (collateralized
by U.S. Treasury Obligations:
total market value
$7,973,750) 7,817 7,817
SALOMON SMITH BARNEY
6.530%, dated 10/31/00,
matures 11/01/00, repurchase
price $8,876,610 (collateralized
by U.S. Treasury Obligations:
total market value
$9,061,863) 8,875 8,875
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $16,692) $16,692
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.4%
(Cost $35,562) $35,562
================================================================================
OTHER ASSETS AND LIABILITIES, NET-- (0.4%) $ (160)
================================================================================
6
<PAGE>
ARK FUNDS SEMI ANNUAL REPORT OCTOBER 31, 2000
PRIME CASH MANAGEMENT PORTFOLIO CONCLUDED
MARKET
DESCRIPTION VALUE (000)
--------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Corporate Class
(unlimited authorization -- no par value)
based on 1,130,306 outstanding shares
of beneficial interest $ 1,130
Portfolio Shares of Corporate II Class
(unlimited authorization -- no par value)
based on 249,856 outstanding shares
of beneficial interest 250
Portfolio Shares of Corporate III Class
(unlimited authorization -- no par value)
based on 34,022,308 outstanding shares
of beneficial interest 34,022
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $35,402
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE II CLASS $1.00
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE III CLASS $1.00
================================================================================
(A) DISCOUNT NOTES. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE
DISCOUNT YIELD AT THE TIME OF PURCHASE.
(B) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON OCTOBER 31, 2000. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
MTN -- MEDIUM TERM NOTE
NA -- NORTH AMERICA
SER -- SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
<PAGE>
CASH MANAGEMENT PORTFOLIOS
TAX-FREE CASH MANAGEMENT PORTFOLIO
STATEMENT OF NET ASSETS
AS OF OCTOBER 31, 2000 (UNAUDITED)
[PIE GRAPHIC OMITTED]
% OF TOTAL PORTFOLIO INVESTMENTS
General Obligations -- 5%
Tax-Exempt Commercial Paper -- 11%
Anticipation Notes -- 4%
Revenue Bonds -- 80%
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES -- 99.7%
ARIZONA -- 0.7%
MARICOPA, POLLUTION CONTROL
AUTHORITY RB, ARIZONA PUBLIC
SERVICES, SER B, LOC (A)
4.600%, 11/01/00 $ 200 $ 200
--------------------------------------------------------------------------------
TOTAL ARIZONA $ 200
--------------------------------------------------------------------------------
DISTRICT OF COLUMBIA -- 2.5%
DISTRICT OF COLUMBIA GO,
SER 1992 A-1, LOC (A)
4.700%, 11/01/00 200 200
DISTRICT OF COLUMBIA GO,
SER 1992 A-2, LOC (A)
4.700%, 11/01/00 100 100
DISTRICT OF COLUMBIA GO,
SER 1992 A-4, LOC (A)
4.700%, 11/01/00 100 100
DISTRICT OF COLUMBIA GO,
SER 1992 A-6, LOC (A)
4.700%, 11/01/00 300 300
--------------------------------------------------------------------------------
TOTAL DISTRICT OF COLUMBIA $ 700
--------------------------------------------------------------------------------
FLORIDA -- 14.4%
FLORIDA STATE, HOUSING FINANCE
AUTHORITY RB, FNMA (A)
4.350%, 11/01/00 1,100 1,100
JACKSONVILLE TECP
4.250%, 12/05/00 1,000 1,000
PINELLAS COUNTY, HOUSING &
FINANCE AUTHORITY RB,
FOXBRIDGE APARTMENTS,
SER A, FNMA (A)
4.350%, 11/03/00 1,000 1,000
SUNSHINE STATE TECP
4.250%, 12/05/00 1,000 1,000
--------------------------------------------------------------------------------
TOTAL FLORIDA $4,100
--------------------------------------------------------------------------------
<PAGE>
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
ILLINOIS -- 0.4%
ILLINOIS STATE, DEVELOPMENT
& FINANCE AUTHORITY RB,
POLLUTION CONTROL, AMOCO
OIL PROJECT (A)
4.600%, 11/01/00 $ 100 $ 100
--------------------------------------------------------------------------------
TOTAL ILLINOIS $ 100
--------------------------------------------------------------------------------
INDIANA -- 4.2%
ROCKPORT, POLLUTION
CONTROL RB, MICHIGAN POWER
PROJECT, AMBAC (A)
4.350%, 11/03/00 1,200 1,200
--------------------------------------------------------------------------------
TOTAL INDIANA $1,200
--------------------------------------------------------------------------------
KENTUCKY -- 3.5%
KENTUCKY STATE, ECONOMIC
DEVELOPMENT FINANCE
AUTHORITY RB, BAPTIST
CONVALESCENT CENTER, LOC (A)
4.450%, 11/03/00 1,000 1,000
--------------------------------------------------------------------------------
TOTAL KENTUCKY $1,000
--------------------------------------------------------------------------------
LOUISIANA -- 1.1%
LOUISIANA STATE, PUBLIC FACILITIES
AUTHORITY RB, KENNER HOTEL
PROJECT, LOC (A)
4.550%, 11/01/00 300 300
--------------------------------------------------------------------------------
TOTAL LOUISIANA $ 300
--------------------------------------------------------------------------------
MARYLAND -- 10.2%
MARYLAND STATE, HEALTH & HIGHER
EDUCATION FACILITIES AUTHORITY
RB, CHARLESTOWN COMMUNITY,
SER 1998-A, LOC (A)
4.300%, 11/01/00 1,000 1,000
MARYLAND STATE, HEALTH & HIGHER
EDUCATION FACILITIES AUTHORITY
RB, POOLED LOAN PROGRAM,
SER B, LOC (A)
4.250%, 11/01/00 1,000 1,000
MARYLAND STATE, HEALTH & HIGHER
EDUCATION FACILITIES AUTHORITY
RB, POOLED LOAN PROGRAM,
SER D, LOC (A)
4.300%, 11/02/00 900 900
--------------------------------------------------------------------------------
TOTAL MARYLAND $2,900
--------------------------------------------------------------------------------
MASSACHUSETTS -- 4.9%
MASSACHUSETTS STATE, HEALTH &
EDUCATIONAL FACILITIES AUTHORITY
RB, HARVARD UNIVERSITY (A)
3.950%, 11/01/00 1,400 1,400
--------------------------------------------------------------------------------
TOTAL MASSACHUSETTS $1,400
--------------------------------------------------------------------------------
8
<PAGE>
ARK FUNDS SEMI ANNUAL REPORT OCTOBER 31, 2000
TAX-FREE CASH MANAGEMENT PORTFOLIO CONTINUED
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
MICHIGAN -- 1.8%
DETROIT WATER SUPPLY SYSTEMS
RB, FGIC (A)
4.300%, 11/01/00 $ 500 $ 500
--------------------------------------------------------------------------------
TOTAL MICHIGAN $ 500
--------------------------------------------------------------------------------
MINNESOTA -- 4.2%
MINNEAPOLIS TAX INCREMENT GO,
SER A (A)
4.250%, 11/02/00 200 200
MINNESOTA STATE, SCHOOL DISTRICT
TAX & AID ANTICIPATION
INDEBTEDNESS COP, SER B
5.000%, 08/17/01 1,000 1,005
--------------------------------------------------------------------------------
TOTAL MINNESOTA $1,205
--------------------------------------------------------------------------------
MISSOURI -- 8.5%
COLUMBIA RB, SER A,
LOC (A)
4.350%, 11/01/00 1,000 1,000
MISSOURI STATE, HEALTH &
EDUCATION FACILITIES AUTHORITY
RB, WASHINGTON UNIVERSITY
PROJECT, SER A (A)
4.650%, 11/01/00 1,400 1,400
--------------------------------------------------------------------------------
TOTAL MISSOURI $2,400
--------------------------------------------------------------------------------
NEVADA -- 3.5%
CLARK COUNTY, AIRPORT
IMPROVEMENT AUTHORITY RB,
SER A, MBIA, LOC (A)
4.250%, 11/01/00 1,000 1,000
--------------------------------------------------------------------------------
TOTAL NEVADA $1,000
--------------------------------------------------------------------------------
NEW JERSEY -- 4.9%
NEW JERSEY STATE, MUNICIPAL
SECURITIES TRUST RECEIPTS,
SER CB1 (A)
4.300%, 02/15/01 1,400 1,400
--------------------------------------------------------------------------------
TOTAL NEW JERSEY $1,400
--------------------------------------------------------------------------------
NORTH CAROLINA -- 4.6%
RALEIGH DURHAM, AIRPORT
AUTHORITY RB, AMERICAN AIRLINES
PROJECT, SER A, LOC (A)
4.650%, 11/01/00 1,000 1,000
RALEIGH DURHAM, AIRPORT
AUTHORITY RB, AMERICAN AIRLINES
PROJECT SER B, LOC (A)
4.650%, 11/01/00 300 300
--------------------------------------------------------------------------------
TOTAL NORTH CAROLINA $1,300
--------------------------------------------------------------------------------
PRINCIPAL MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
--------------------------------------------------------------------------------
PENNSYLVANIA -- 13.8%
ALLEGHENY COUNTY, HOSPITAL
DEVELOPMENT AUTHORITY
RB, PRESBYTERIAN UNIVERSITY
HEALTH SYSTEM, MBIA (A)
4.400%, 11/02/00 1,000 $ 1,000
DELAWARE VALLEY, REGIONAL
FINANCE AUTHORITY RB,
GOVERNMENT REVENUE,
SER A, LOC (A)
4.300%, 11/01/00 1,400 1,400
MONTGOMERY COUNTY, INDUSTRIAL
DEVELOPMENT AUTHORITY RB,
SETON MEDICAL, LOC (A)
4.250%, 11/07/00 500 500
SOUTHEASTERN PENNSYLVANIA
TRANSIT AUTHORITY RB, LOC
6.000%, 06/01/01 1,000 1,009
--------------------------------------------------------------------------------
TOTAL PENNSYLVANIA $ 3,909
--------------------------------------------------------------------------------
SOUTH DAKOTA -- 3.5%
LOWER BRULE SIOUX TRIBE GO,
LOC (A)
4.400%, 11/02/00 1,000 1,000
--------------------------------------------------------------------------------
TOTAL SOUTH DAKOTA $ 1,000
--------------------------------------------------------------------------------
TEXAS -- 4.6%
MIDLOTHIAN, INDUSTRIAL
DEVELOPMENT AUTHORITY RB,
BOX-CROW CEMENT PROJECT,
LOC (A)
4.300%, 11/01/00 300 300
TEXAS STATE TRAN
5.250%, 08/31/01 1,000 1,008
--------------------------------------------------------------------------------
TOTAL TEXAS $ 1,308
--------------------------------------------------------------------------------
WASHINGTON -- 4.2%
WASHINGTON STATE, PUBLIC POWER
SUPPLY RB, NUCLEAR PROJECT,
AMBAC (A)
4.400%, 11/01/00 1,200 1,200
--------------------------------------------------------------------------------
TOTAL WASHINGTON $ 1,200
--------------------------------------------------------------------------------
WYOMING -- 4.2%
LINCOLN COUNTY, POLLUTION
CONTROL AUTHORITY RB,
EXXON PROJECT (A)
4.600%, 11/01/00 100 100
SWEETWATER COUNTY TECP
4.250%, 11/08/00 1,100 1,100
--------------------------------------------------------------------------------
TOTAL WYOMING $1,200
--------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS & NOTES
(Cost $28,322) $28,322
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.7%
(Cost $28,322) $28,322
================================================================================
OTHER ASSETS AND LIABILITIES, NET-- 0.3% $ 92
================================================================================
9
<PAGE>
CASH MANAGEMENT PORTFOLIOS
TAX-FREE CASH MANAGEMENT PORTFOLIO CONCLUDED
MARKET
DESCRIPTION VALUE (000)
--------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Corporate III Class
(unlimited authorization -- no par value)
based on 28,413,731 outstanding shares
of beneficial interest $ 28,414
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $28,414
================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CORPORATE III CLASS $1.00
================================================================================
(A) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON OCTOBER, 31 2000. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
COP -- CERTIFICATE OF PARTICIPATION
GO -- GENERAL OBLIGATION
LOC -- SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A
MAJOR BANK OR OTHER FINANCIAL INSTITUTION.
RB -- REVENUE BOND
SER -- SERIES
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX & REVENUE ANTICIPATION NOTE
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR THE
SECURITIES LISTED ABOVE, AS INDICATED.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<PAGE>
STATEMENTS OF OPERATIONS (000) (UNAUDITED)
FOR THE PERIOD ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
U.S. TREASURY U.S. GOVERNMENT PRIME TAX-FREE
CASH CASH CASH CASH
MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest $46 $9,362 $315 $420
--- ------ ---- ----
Total Investment Income 46 9,362 315 420
--- ------ ---- ----
EXPENSES:
Administrator Fees 1 183 6 13
Less: Waiver of Administrator Fees -- (95) (3) (7)
Investment Advisory Fees 1 211 7 15
Less: Waiver of Investment Advisory Fees -- (153) (2) (10)
Custodian Fees -- 44 1 1
Transfer Agency Fees -- 14 -- 1
Professional Fees -- 17 -- 1
Registration Fees -- 72 1 4
Distribution Fees -- Corporate II Class -- 346 -- --
Distribution Fees -- Corporate III Class 2 5 14 40
Printing Fees -- 19 -- 2
Trustee Fees -- 3 -- --
Miscellaneous Fees -- 24 2 3
--- ------ ---- ----
Total Expenses 4 690 26 63
--- ------ ---- ----
Net Investment Income 42 8,672 289 357
--- ------ ---- ----
Net Realized Gain on Investments -- 3 -- --
--- ------ ---- ----
Net Increase in Net Assets
Resulting from Operations $42 $8,675 $289 $357
=== ====== ==== ====
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (000) (UNAUDITED)
FOR THE PERIOD INDICATED
<TABLE>
<CAPTION>
U.S. TREASURY U.S. GOVERNMENT PRIME TAX-FREE
CASH CASH CASH CASH
MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- ---------- ----------
7/21/00* 6/1/00* 6/5/00* 6/23/00*
to 10/31/00 to 10/31/00 to 10/31/00 to 10/31/00
------------- --------------- ---------- ----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 42 $ 8,672 $ 289 $ 357
Net Realized Gain on Investments -- 3 -- --
------ -------- ------- -------
Net increase in Net Assets from Operations 42 8,675 289 357
------ -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income
Corporate Class -- (21) (67) --
Corporate II Class (42) (8,573) (8) --
Corporate III Class -- (78) (214) (357)
------ -------- ------- -------
Total Distributions (42) (8,672) (289) (357)
------ -------- ------- -------
CAPITAL SHARE TRANSACTIONS:
Corporate Class:
Shares Issued -- 121,804 8,340 --
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed -- (121,804) (7,210) --
------ -------- ------- -------
Total Corporate Class Share Transactions -- -- 1,130 --
------ -------- ------- -------
Corporate II Class:
Shares Issued 7,974 749,032 9,846 --
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed (5) (399,368) (9,596) --
------ -------- ------- -------
Total Corporate II Class Share Transactions 7,969 349,664 250 --
------ -------- ------- -------
Corporate III Class:
Shares Issued 5 46,095 48,125 36,076
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed (5) (43,553) (14,103) (7,662)
------ -------- ------- -------
Total Corporate III Class Share Transactions -- 2,542 34,022 28,414
------ -------- ------- -------
Increase in Net Assets from
Shareholder Transactions 7,969 352,206 35,402 28,414
---- ------- ------ ------
NET INCREASE IN NET ASSETS 7,969 352,209 35,402 28,414
NET ASSETS:
Beginning of period -- -- -- --
------ -------- ------- -------
End of period $7,969 $352,209 $35,402 $28,414
====== ======== ======= =======
SHARES ISSUED AND REDEEMED:
Corporate Class:
Shares Issued -- 121,804 8,340 --
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed -- (121,804) (7,210) --
------ -------- ------- -------
Total Corporate Class share Transactions -- -- 1,130 --
------ -------- ------- -------
Corporate II Class:
Shares Issued 7,974 749,032 9,846 --
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed (5) (399,368) (9,596) --
------ -------- ------- -------
Total Corporate II Class share Transactions 7,969 349,664 250 --
------ -------- ------- -------
Corporate III Class:
Shares Issued 5 46,095 48,125 36,076
Shares Issued in Lieu of Cash Distributions -- -- -- --
Shares Redeemed (5) (43,553) (14,103) (7,662)
------ -------- ------- -------
Total Corporate III Class share Transactions -- 2,542 34,022 28,414
------ -------- ------- -------
Net Increase in share Transactions 7,969 352,206 35,402 28,414
====== ======== ======= =======
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED OCTOBER 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSET
BEGINNING INVESTMENT GAINS OR (LOSSES) FROM INVESTMENT FROM CAPITAL VALUE, END
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD
-----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------
U.S. TREASURY CASH MANAGEMENT PORTFOLIO
---------------------------------------
<S> <C> <C> <C> <C>
CORPORATE II CLASS
2000 (1) $1.00 0.02 -- (0.02) -- $1.00
CORPORATE III CLASS
2000 (2) $1.00 0.01 -- (0.01) -- $1.00
-----------------------------------------
U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO
-----------------------------------------
CORPORATE CLASS
2000 (3) $1.00 -- -- -- -- $1.00
CORPORATE II CLASS
2000 (4) $1.00 0.03 -- (0.03) -- $1.00
CORPORATE III CLASS
2000 (5) $1.00 0.02 -- (0.02) -- $1.00
-------------------------------
PRIME CASH MANAGEMENT PORTFOLIO
-------------------------------
CORPORATE CLASS
2000 (6) $1.00 0.02 -- (0.02) -- $1.00
CORPORATE II CLASS
2000 (7) $1.00 0.02 -- (0.02) -- $1.00
CORPORATE III CLASS
2000 (8) $1.00 0.01 -- (0.01) -- $1.00
----------------------------------
TAX-FREE CASH MANAGEMENT PORTFOLIO
----------------------------------
CORPORATE III CLASS
2000 (9) $1.00 0.01 -- (0.01) -- $1.00
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
EXPENSES
RATIO OF INVESTMENT TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS
TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
-----------------------------------------------------------------------------------------------------------------------
---------------------------------------
U.S. TREASURY CASH MANAGEMENT PORTFOLIO
---------------------------------------
<S> <C> <C> <C> <C> <C>
CORPORATE II CLASS
2000 (1) 1.62%+ $ 7,969 0.49% 5.72% 0.58%
CORPORATE III CLASS
2000 (2) 0.48%+ $ -- 0.64% 5.47% 0.73%
-----------------------------------------
U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO
-----------------------------------------
CORPORATE CLASS
2000 (3) 0.22%+ $ -- 0.24% 6.43% 0.33%
CORPORATE II CLASS
2000 (4) 2.59%+ $349,667 0.49% 6.18% 0.58%
CORPORATE III CLASS
2000 (5) 2.45%+ $ 2,542 0.64% 6.03% 0.73%
-------------------------------
PRIME CASH MANAGEMENT PORTFOLIO
-------------------------------
CORPORATE CLASS
2000 (6) 1.67%+ $ 1,130 0.24% 6.09% 0.33%
CORPORATE II CLASS
2000 (7) 2.33%+ $ 250 0.49% 6.00% 0.58%
CORPORATE III CLASS
2000 (8) 1.25%+ $ 34,022 0.64% 5.99% 0.73%
----------------------------------
TAX-FREE CASH MANAGEMENT PORTFOLIO
----------------------------------
CORPORATE III CLASS
2000 (9) 1.28%+ $ 28,414 0.64% 3.58% 0.73%
<FN>
+ Total return is for the period indicated and has not been annualized.
(1) Commenced operations on July 21, 2000. All ratios for the period have been annualized.
(2) Commenced operations on October 6, 2000. All ratios for the period have been annualized.
(3) Commenced operations on October 19, 2000. All ratios for the period have been annualized.
(4) Commenced operations on June 1, 2000. All ratios for the period have been annualized.
(5) Commenced operations on June 6, 2000. All ratios for the period have been annualized.
(6) Commenced operations on July 28, 2000. All ratios for the period have been annualized.
(7) Commenced operations on June 5, 2000. All ratios for the period have been annualized.
(8) Commenced operations on August 16, 2000. All ratios for the period have been annualized.
(9) Commenced operations on June 23, 2000. All ratios for the period have been annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
ARK Funds (the "Fund") is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company organized as a Massachusetts business trust pursuant to a
Declaration of Trust dated October 22, 1992, and amended and restated on
March 19, 1993.
The Fund consists of twenty-five separate investment Portfolios
(individually a "Portfolio" and collectively, the "Portfolios"):
U.S. Treasury Cash Management Portfolio
U.S. Government Cash Management Portfolio
Prime Cash Management Portfolio
Tax-Free Cash Management Portfolio
(collectively, the "Cash Management Portfolios")
Money Market Portfolio
Tax-Free Money Market Portfolio
U.S. Government Money Market Portfolio
U.S. Treasury Money Market Portfolio
(collectively, the "Money Market Portfolios")
Short-Term Treasury Portfolio
Short-Term Bond Portfolio
Maryland Tax-Free Portfolio
Pennsylvania Tax-Free Portfolio
Intermediate Fixed Income Portfolio
U.S. Government Bond Portfolio
Income Portfolio
Balanced Portfolio
Equity Income Portfolio
Value Equity Portfolio
Equity Index Portfolio
Blue Chip Equity Portfolio
Capital Growth Portfolio
Mid-Cap Equity Portfolio
Small-Cap Equity Portfolio
International Equity Portfolio
(formerly International Equity Selection Portfolio)
Emerging Markets Equity Portfolio
The financial statements and notes presented herein are those of the Cash
Management Portfolios. The financial statements of the other Portfolios
listed above are not presented herein, but are presented separately. The
Fund may issue an unlimited number of shares of each of its Portfolios.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Although actual results
could differ from these estimates, any such differences are expected to be
immaterial to the net assets of the Portfolios. The following is a summary
of significant accounting policies followed by the Portfolios.
SECURITY VALUATION -- Investment securities held by the Portfolios are
stated at their amortized cost, which approximates market value. Under the
amortized cost method, any discount or premium is amortized ratably to the
maturity of the security and is included in interest income.
INCOME TAXES -- It is the intention of each Portfolio to qualify as a
regulated investment company and to distribute all of its taxable income.
Accordingly, no provision for federal income taxes is considered necessary.
NET ASSET VALUE PER SHARE -- The net asset value per share of each class of
each Portfolio is calculated every business day. It is computed by dividing
the total assets of each class of the Portfolio, less the class-related
liabilities, by the number of outstanding shares of each class of the
Portfolio.
CLASSES -- Each class of shares has equal rights as to earnings, assets and
voting privileges, except that each class bears different distribution and
shareholder service expenses. Each class of shares has exclusive voting
rights with respect to matters that affect just that class. Class-specific
expenses are borne by the applicable class. Other expenses, income and
realized and unrealized gains/losses are allocated to the respective
classes on the basis of relative daily net assets.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until maturity of the repurchase
agreements. Provisions of the repurchase agreements and procedures adopted
by the Board of Trustees require that the market value of the collateral,
including accrued interest thereon, is sufficient in the event of default
by the counterparty. If the counterparty defaults and the value of the
collateral declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by the Portfolio may be delayed or limited.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS-- The Portfolios may purchase
securities on a "when-issued" basis and may purchase or sell securities on
a "forward commitment" basis. These transactions, which involve a
commitment by a Portfolio to purchase or sell particular securities with
payment and delivery taking place at a future date (perhaps one or two
months later), permit the Portfolio to lock in a price or yield on a
security it owns or intends to purchase, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the
risk, however, that the yield obtained in a transaction (and therefore the
value of the security) may be less favorable than the yield available in
the market when the securities delivery takes place. The Portfolios
maintain cash, U.S. government securities, or liquid, high-grade debt
obligations in an amount sufficient to meet the purchase price in a
segregated account until the settlement date. No Portfolio intends to
engage in when-issued purchases and forward commitments for speculative
purposes.
DISTRIBUTIONS -- Dividends from net investment income are declared daily
and paid monthly for the Portfolios. Distributions from net capital gains,
if any, are declared and paid at least annually by each Portfolio.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. federal income tax regulations, which
may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. To the extent these differences are permanent, they
are charged or credited to paid-in capital in the period that the
difference arises.
OTHER -- Security transactions are accounted for on the date the security
is purchased or sold (trade date). Original issue discounts and purchase
premiums on securities held by the Portfolios are accreted and amortized
ratably to maturity using the effective interest method. Interest income is
recognized using the accrual method.
3. INVESTMENT ADVISORY AND ADMINISTRATIVE FEES
AND OTHER TRANSACTIONS WITH AFFILIATES
Allied Investment Advisors, Inc. is the investment advisor to each of the
Portfolios. Allied Investment Advisors, Inc. is an affiliate of Allfirst
Trust Company, N.A., the Custodian and Sub-Administrator of each of the
Portfolios. Pursuant to an investment advisory contract on behalf of each
Portfolio, Allied Investment Advisors, Inc. is entitled to receive fees for
its advisory services at the annual rates shown in the following table
based on the average net assets of the Portfolio.
PORTFOLIO ANNUAL RATE
--------------------------------------------------------------------------------
U.S. Treasury Cash Management 0.15%
--------------------------------------------------------------------------------
U.S. Government Cash Management 0.15%
--------------------------------------------------------------------------------
Prime Cash Management 0.15%
--------------------------------------------------------------------------------
Tax-Free Cash Management 0.15%
--------------------------------------------------------------------------------
Allied Investment Advisors, Inc. has agreed to waive a portion of its fees
or reimburse expenses on certain Portfolios in order to limit total
operating expenses of such Portfolios. A portion of these waivers is
voluntary and may be discontinued at any time.
SEI Investments Mutual Funds Services (the "Administrator") serves as
administrator and transfer agent for the Fund under an Administration
Agreement and Transfer Agency Agreement. The Administrator is entitled to
receive an annual fee of 0.13% of each Portfolio's average net assets, paid
monthly, for services performed under the administration agreement. The
Administrator has voluntarily agreed to waive a portion of its
administrative fees on certain Portfolios in order to limit total operating
expenses of such Portfolios. The waiver is voluntary and may be
discontinued at any time. Pursuant to a separate agreement between Allfirst
Trust Company, N.A. and the Administrator, Allfirst Trust Company, N.A.
performs sub-administration services on behalf of the Portfolios, for which
it receives an annual fee, paid by the Administrator, of up to 0.0275% of
each Portfolio's net assets. Allfirst Trust Company, N.A. is currently
waiving this fee. The waiver is voluntary and may be discounted at any
time.
4. DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The fund's Board of Trustees has adopted a Distribution and Services Plan
on behalf of each Portfolio pursuant to Rule 12b-1 under the 1940 Act.
Under the Plan, SEI Investments Distribution Co. ("SIDCO") acts as
Distributor for the Fund pursuant to a Distribution Agreement on behalf of
each Portfolio. The Plan permits payment of up to 0.25% of the average net
assets of the Corporate II Class shares of each Portfolio and 0.40% of the
average net assets of the Corporate III Class shares of each Portfolio.
15
<PAGE>
NOTICE TO SHAREHOLDERS
(UNAUDITED)
For taxpayers filing on a calendar year basis, this notice is for informational
purposes only.
For the fiscal year ended October 31, 2000, each Portfolio is designating the
following items with regard to distributions paid during the year.
<TABLE>
<CAPTION>
LONG TERM (20% RATE) ORDINARY
CAPITAL GAINS INCOME TAX-EXEMPT
DISTRIBUTIONS DISTRIBUTION INCOME QUALIFYING
PORTFOLIO (TAX BASIS) (TAX BASIS) DISTRIBUTION TOTAL DIVIDENDS (1)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. Treasury Cash Management 0% 100% 0% 100% 0%
------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Cash Management 0% 100% 0% 100% 0%
------------------------------------------------------------------------------------------------------------------------------------
Prime Cash Management 0% 100% 0% 100% 0%
------------------------------------------------------------------------------------------------------------------------------------
Tax-Free Cash Management 0% 0% 100% 100% 0%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Qualifying dividends represent dividends that qualify for the corporate
dividends received deduction.
</FN>
</TABLE>
16
<PAGE>
INVESTMENT ADVISOR
--------------------------------------------------------------------------------
Allied Investment Advisors, Inc.
Baltimore, Maryland
TRUSTEES
--------------------------------------------------------------------------------
William H. Cowie, Jr.
David D. Downes
Victor Garland
Rick A. Gold
Charlotte R. Kerr
Thomas Schweizer
Richard B. Seidel
ADMINISTRATOR
--------------------------------------------------------------------------------
SEI Investments Mutual Funds Services
Oaks, Pennsylvania
DISTRIBUTOR
--------------------------------------------------------------------------------
SEI Investments Distribution Co.
Oaks, Pennsylvania
LEGAL COUNSEL
--------------------------------------------------------------------------------
Kirkpatrick & Lockhart LLP
Washington, D.C.
INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
KPMG LLP
Boston, Massachusetts
CUSTODIAN
--------------------------------------------------------------------------------
Allfirst Trust Co., N.A.
Baltimore, Maryland
--------------------------------------------------------------------------------
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the ARK Funds. The report is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus for each of the portfolios included.
Shares of the portfolios are not deposits of any bank, and are not insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency. Investing in the shares involves investment risks
including the possible loss of principal amount invested.
--------------------------------------------------------------------------------
[ARK Logo Omitted]
101-624
25 South Charles Street
Baltimore, MD 21201
We are pleased to send you our Semi Annual Report for
the period ended 10/31/00. This report contains important
information about your investments in the ARK Funds.
Since we are required by law to send a semi annual
report to each person listed as a shareholder, you
(or your household) may receive more than one report.
This material must be preceded
or accompanied by a current
prospectus.
ARK-F-013-01
